How do I finance the start-up of a small business?

To determine financing needs, you should first prepare a business plan with a complete set of financial projections including a balance sheet, income statement, and cash flow statement. With a properly completed business plan, you will have identified your funding needs. Banks will lend to some business start-ups if they are satisfied with your business plan, your level of equity investment, the collateral you have to pledge to the loan, and your credit history and experience.

Will the SBA (Small Business Administration) loan money to me?

Except in isolated and special situations, the SBA does not make direct loans. Its loan activity is in the form of participating loans and loan guarantees. You must deal with a bank to reach the SBA. You can think of the SBA as a level above your bank that is providing incentives to your bank to make it easier for you to get debt financing. The bank plays a major role in evaluating your loan application and in administering the loan. The bank's agreement is necessary before the SBA will get involved.

Does the SBDC Network provide financing?

The SBDC does not provide financing. Our assistance is technical and educational in nature. We work with banks and other lending agencies and organizations to assist in putting together financial projections, but the actual financing comes from outside sources. We have strong relationships with lending institutions that may benefit your chances of receiving funding. Having inside knowledge of these lending institutions, we can match your business, credit, and plan up with an appropriate lender, increasing your odds of getting financed.

Richard Prets is the director of the Small Business Development Center at San Jacinto College. The San Jacinto College SBDC is a business consulting and training center of the University of Houston Small Business Development Network. The UH-SBDC is a resource partner of and is partially funded by the SBA and serves 32 counties in Southeast Texas. San Jacinto College is an equal opportunity employer and its campuses are handicap accessible. The Center can be reached at 281-485-5214 X7.